Britology Watch: Deconstructing \’British Values\’

24 October 2007

Immigration As Onshoring

Immigration, from an economic point of view, could be described as a form of ‘onshoring’. What is this? People are more familiar with the term ‘offshoring’, which is used to describe large enterprises’ practice of contracting out certain business functions to third-party providers in ‘offshore’ destinations: places like India, Singapore, Malaysia, Eastern Europe and, increasingly, China. I.e. when the phone call you make to your bank or insurance company is routed to a call centre in Bangalore or wherever, this means the bank or insurer in question has generally outsourced that particular customer-service function to an offshore provider.

‘Onshore’ is in fact a term that is used by offshoring providers (which include major household-name consulting and IT-services firms such as Accenture, Cap Gemini, IBM and many others) to refer to the siting of such outsourced facilities in the client’s own country, for reasons such as the practical need to be physically close to the client or because the client’s own customers (e.g. you and me as bank account holders) aren’t happy chatting about our intimate details to people located half the way round the globe (although that can make it easier for some people). ‘Nearshore’ is when the outsourcing provider is located in the same ‘region’ as the client; although the way some multinationals segment the globe into different regions, for a UK customer, that could just as easily mean Moscow or Dubrovnik as Dublin or Amsterdam.

What’s the purpose of offshoring? It’s fundamentally a means for businesses to cut costs. It’s cheaper to use the services of third-party specialists in developing economies because their labour costs are so much lower and because they can produce economies of scale in delivering the required function that an individual business would be unable to achieve if it maintained the function in house.

What kind of ‘onshoring’ is enabled by immigration? It’s basically the mirror image of offshoring: instead of sending work out to parts of the world where staff are cheap, hard-working but also well qualified, immigration / onshoring functions by importing the same types of staff from similar parts of the world to work in the UK. The reason why there is a need to import workers (rather than export the work) is that the jobs they are needed to do are physical in nature and can only be done in the UK; e.g. agricultural work, low-grade industrial jobs, cleaning, plumbing, building, waiting table – but also highly skilled jobs such as nursing, medical practice, teaching, etc.

The economic rationale for meeting this labour requirement through migrant workers / onshoring is essentially the same as that for offshoring: staff of this sort are cheaper, more hard-working and often more skilled than their British alternatives. So it’s easier for UK plc to simply access a ready-made pool of affordable, qualified staff from abroad rather than go to the trouble of training and maintaining a sufficient number and quality of personnel ‘in house’. The extra costs on the economy that would be required to train up British people to do all the jobs that are needed and to pay them acceptable wages are not merely analogous to the extra costs faced by businesses in maintaining certain functions in house rather than offshoring: in many instances, it would of course be businesses themselves that would be carrying out the training and paying the salaries of these additional British workers.

The fact that immigration serves the purposes of onshoring as described above dawned on me last week when the Home Office published details of a report it has produced for the House of Lords Select Committee on Economic Affairs on the economic ‘benefits’ of immigration. It was striking how these benefits were described in almost starkly economic terms. Not surprising, I suppose, given the economic remit for the report. All the same, though, no consideration was given (at least in the media reports on the Home Office’s paper) to how the social impact of mass migration might counteract some of the advantages measured in purely macro-economic terms.

For instance, the report said migration had had no significant impact on the unemployment rates of British citizens. In other words, it hasn’t increased unemployment; but had it not been for the migration, would there not have been a need to employ more British people instead? The counter-argument then goes that a) there is a shortage of the skills involved, and b) British people are often unwilling to do some of the more menial jobs concerned. But this of course comes down mostly to . . . economics again. There’s a skill shortage because we haven’t been prepared to invest in training up our own population to a sufficient standard (this would require higher taxes but would then lead to more well-paid British people in work paying tax). And British people are often not prepared to do certain types of physical work because it’s undervalued – in both an economic sense (humiliatingly and impractically low-paid) and a cultural sense: we look down on menial work of this sort rather than showing respect to the people who do it on our behalf. And because we undervalue this ‘low-grade’ work and the people who do it, we feel it’s fitting to outsource it (or should that be ‘insource’ it?) to immigrants for whom we needn’t have so much of a sense of responsibility.

Again, the Home Office report said that immigration has had a slightly positive effect on wage levels overall and only “very modest negative effects” on the lowest-paid unskilled workers, which has in turn been mitigated by the minimum wage (i.e. immigration ensures that more people get paid only the minimum wage and not more). Well, forgive me, but a ‘modest’ deterioration in the pay of an already low-paid worker is equivalent to a substantial pay cut for better-paid workers – and they’re already at the bottom of the food chain. And this is not even taking account of the impact of the black economy of illegal migrants who are paid well below the minimum wage and therefore limit the number of jobs in the legal economy that would be available at minimum-wage levels. But this, too, is economically ‘beneficial’ up to a certain point, in that it drives down costs in the economy as a whole, resulting in cheaper goods and services, and more personal wealth for those who exploit illegal immigrants in this way, and thereby promote illegal immigration.

One of the implications of all this is that it seems that government is now prepared to accept the existence of a permanent stratum of British society (sometimes derogatorily referred to as the ‘underclass’) consisting of under-qualified people who are either unable or unwilling to find employment, partly because wages have been driven down to the lowest legal level, and partly because they share society’s attitude that certain types of work are demeaning. Does this signify that we’ve abandoned altogether the aim of creating ‘full employment’ for all our citizens: a phrase belonging to the political vocabulary of the 1970s and 1980s?

Economists talk of the inevitability of a certain level of ‘structural unemployment’ in modern economies. What this means is that there will always be a proportion of the population of working age for whom ‘suitable’ employment will not be available as economies develop and the needs of business evolve. These people in theory then need to be re-trained and incentivised to seek and take up whatever work is on offer. Logically, however, if the needs of business are increasingly being met by migrant workers and the number of unemployed British citizens is remaining pretty much constant over time, this must mean there is a fairly substantial number of long-term unemployed and people for whom the creation of personally and financially rewarding employment has become a low priority, politically and economically.

These trends must be linked to the high levels of crime and social problems such as family break-downs, drug abuse and anti-social behaviour. This is not to say that the lack of opportunities in education, training and employment are simply the cause of social disintegration. It works both ways: people don’t take up the opportunities that are there because they can’t be bothered to work and would rather live on whatever benefits are available plus illicit sources of income, including the black economy and crime. But it seems obvious to me that many of these social ills result from people not feeling they have a stake in mainstream society and its much-vaunted prosperity. This is particularly clear in the case of young people, many of whom grow up in dysfunctional families without a responsible father figure (and often, what father figure there is will not be a model of a disciplined approach to working life), are inadequately educated and are exposed to all sorts of malign social influences that foster an antagonistic, aggressive attitude towards authority figures and social institutions – including providers of training and employment. In a sense, it’s no wonder that so many of these youngsters drift into a life of crime and delinquency. Even less surprising given that society and business seem to have abandoned the aim of creating opportunity and legitimate economic activity for them and take the easy option of filling the job vacancies with migrants.

Those same economists and politicians would argue that this sort of analysis is simplistic and that in a global economy, business must be free to access the best ‘human resources’ at the most affordable price on a truly global scale – whether that means offshoring or onshoring in my sense. And it is true that immigration can’t be viewed in isolation from globalisation, and Britain can’t sit on the beach head – Canute-like – and command the tide of ‘necessary’ migrant workers to turn away from our shores. Equally, however, this issue forces us to think about the social purpose of economic activity and growth. Ultimately, business and economic activity should be about meeting the basic needs of the society in which they take place: the need for employment, and the need for both essential and (where possible) luxury goods and services. Business and economic growth are not aims in themselves but are only of any real value if they contribute to meeting the needs of all, or as many as possible, in our society in a sustainable manner. But under Thatcher, Blair and now Brown, we’ve abandoned an economic model that puts the needs of society first in favour of one that prioritises the needs of the market.

I’m not saying we should revert to a discredited socialist socio-economic model, and I’m not a socialist. But there does need to be some re-balancing of our idolatry of the market: the market does not intrinsically meet, and is not in practice meeting, the needs of British society if we’re having to transform the country into a microcosm of the global economy by importing foreign workers to do the jobs that should preferably be intended for British people who could benefit from them.

And it is not just ‘British society’, and ‘the country’ as Britain or the UK, that I’m concerned about. As someone who cares passionately about England and would like to see England reaffirm itself officially as a distinct nation (not necessarily through complete independence), the impact of immigration is profoundly worrying. This issue was thrown into a disturbing light yesterday when the UK government’s Office for National Statistics released new forecasts for ‘the country’s’ population growth. These revise previous forecasts upwards and predict that the UK population (and that’s just the official number) will grow by 4.4 million to 65 million by 2016; and then to 70 million by 2028, reaching 71 million by 2031.

According to the ONS, just under half of the 4.4 million increase to 2016 will be accounted for by ‘net inward migration’: the difference between immigrants and emigrants. But as the number of people escaping the UK to live abroad last year was put in the region of around 200,000, I believe, potentially the number of immigrants settling in the UK by 2016 could be around four million. (And incidentally, how much of the ‘skills shortage’ adduced in support of immigration results from the fact that it is mainly skilled professionals and people with a trade that are emigrating?) In addition, the remaining portion of the population growth that is accounted for by increased fertility and longer life expectancy also includes a substantial contribution from the immigrant population. Immigrants tend to be younger and, accordingly, of child-rearing age; and they often come from cultures where families tend to be bigger than in the UK. The correspondent discussing the ONS report on the BBC One news last night suggested therefore that immigration, directly or indirectly, would account for around 70% of the overall projected population growth.

Of course, these are just forecasts, and all manner of environmental, economic, political or security events or crises could intervene to derail the UK’s economic growth that is fuelling the immigration. But one of the most disturbing aspects of the forecasts was the fact that most of the population growth will be concentrated in England. You could miss this fact from one of the ways in which the numbers are set out: population rise to 2016 of 8% for England, 7% for Northern Ireland, 5% for Wales and only 3% for Scotland – lower fertility and life expectancy being the reasons mentioned for that last statistic; but it also obviously means lower immigration.

But an 8% population rise for England (which accounts for around 85% of the UK population currently) is clearly massively more in absolute terms than 7% for Northern Ireland, 5% for Wales and 3% for Scotland. A graph on the BBC News web page discussing the ONS report makes this clearer (see above link). From this, you can tell that – should the predictions prove accurate – the population of England will rise from around 51.5 million now to over 60 million by 2031. In my estimation, that’s well over 80% of the overall population growth.

OK, you could say that this is proportionately less of a burden, relative to the current population, than will be shouldered by the rest of the UK. But England is already far more densely populated than the other countries of the UK; indeed (I think this is correct), England is the country with the highest population density in the world. In this context, to be reckoning with a population increase of such magnitude (8% by 2016 and over double that by 2031) seems total madness. There are all manner of huge implications in all of this in terms of environmental and economic impact and sustainability, town planning and housing, and the effect on English social cohesion and culture.

Apart from any of these broader complex issues, one has to ask whether we really need and want such a massive population growth. I think most English people would give a resounding ‘no’ to such a question. And that doesn’t mean their objections or fears can simply be written off as the expression of ignorance or nationalistic xenophobia. Clearly, some of the population growth is unavoidable and even desirable: we need more babies to be born, grow up and prosper in order to offset and maintain a population that is ageing owing to longer life expectancy. Equally, for the time being at least, there is not much that can be done to limit migration from other EU countries. But most immigration experts accept that EU immigration is not the main problem, as citizens of other EU countries come and go (just as UK citizens go to live and work in other EU countries, and then often return). The real issue is non-EU migrants whose aim is to stay permanently.

Personally speaking, I don’t object at all on principle to people coming to England from non-EU or non-European backgrounds, or indeed non-British-cultural backgrounds, in the broad sense of coming from non-Commonwealth / non-former-British-imperial countries. Other people sympathetic to the aim of greater autonomy and independence for England would be more opposed to such immigration on principle. But where I share common ground with those people is in the view that immigration needs to be set at a realistic, reasonable and sustainable level that puts the needs of the people who are already here – the needs of English people – first: those needs (indeed, rights) I talked about above. For employment, training, personal fulfilment and quality of life, the necessities of life and a bit of luxury, and a stake in the future of their own country.

What nation wouldn’t seek to look after its own people first before seeing what assistance it could offer to people from other countries who are seeking to make a life for themselves and can make a valuable contribution to the society and economy of the country into which they immigrate? Well, England, apparently. But no, it’s not a case of England not putting the needs of its own people first, but rather of the UK not serving and caring about England. Strategy and policy in these matters are decided and implemented by politicians and business people who are not properly accountable to the English people. Indeed, they often regard the very notion of England and the idea that England should weigh in the balance in considerations about immigration into the UK as irrelevant, even embarrassing. Business and the economy are going to need this extra population in order to sustain their current growth trajectory, so they reason; but do the people exist to feed the greed of growth-obsessed global markets, or are markets there to feed the people? Is UK plc just a growing pool of human resources drawn from all over the world that businesses operating here should be able to access at will (just as they can access human resources from all over the world for other purposes, via offshoring)? Or is the UK, rather, just a formerly convenient, but now increasingly oppressive, grouping of individual nations that wish to regain their freedom to decide for themselves about the demographic, economic and environmental changes that will be in the best interests of their people in the 21st century?

One thing’s for sure: if the kind of massive population growth that is projected, concentrated in England, is allowed to go ahead, this will crack to breaking point the current political system that allows Scottish and Welsh MPs to exercise a disproportionate influence on English social and economic policy; and which ensures that Scottish and Welsh people enjoy a greater per-capita share of the UK’s wealth than English people. If the English population is going to increase to such an extent, and that of other UK countries by so little by comparison, surely the system will crack.

But let’s hope it cracks sooner rather than later, before it’s too late, so that English people can start to decide for themselves how much immigration and population growth is acceptable and feasible for such a small, overcrowded but proud, independent-spirited and dynamic nation.

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4 Comments »

  1. […] Read it all here […]

    Pingback by Drug Addiction » Blog Archive » Immigration As Onshoring — 24 October 2007 @ 10.42 am | Reply

  2. […] Britology Watch: Deconstructing ‘British Values’ wrote an interesting post today on Immigration As OnshoringHere’s a quick excerptImmigration As Onshoring Filed under: Barnett Formula, Britology, EU, England, English ethnicity, … or insurance company is routed to a call centre in Bangalore or wherever, this means the bank or insurer […]

    Pingback by Life Insurance » Immigration As Onshoring — 24 October 2007 @ 2.00 pm | Reply

  3. I’m glad you made the point that only a ‘modest’ reduction in wages for those earning the least has a didproptionately negative effect on their standard of living, and so they in no way benefit from immigration.

    Comment by lee — 24 October 2007 @ 4.18 pm | Reply

  4. […] of immigration for a combination of ideological and economic reasons (which are disputable – see my previous post on this subject), then it would simply be unworkable to allow an extra 200,000 British babies per […]

    Pingback by We wouldn’t need immigration if we banned abortion « Britology Watch: Deconstructing ‘British Values’ — 24 October 2007 @ 11.10 pm | Reply


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